Hiring your first employee.

By Neil DavidsonYou’re running a successful mISV. You’ve given up your day job and are working 10 hour days. You’re pulling in a few thousand dollars a month. You’re ready to take the next step and hire your first employee. It’s a big move. Here are ten tips to make it work.
1) You’ve gotten this far with your mISV so I’m guessing you’re a generalist. You’re a good-to-very-good developer, you can cope with marketing, can sell if you’re pushed and are making a decent fist of your accounts. But now is the time to hire a specialist. So, figure out which specialism to hire for. What aren’t you good at? What do you hate doing? What would free up the most of your time so you can focus what you’re best at?
2) Get over your fear of delegation. You probably think that nobody could possibly support your product as well as you, or learn enough about it to sell it as well as you do, or understand your code well enough to maintain it, or get inside the heads of your customers to market it as well as you can. Wrong, wrong, wrong and wrong. There are talented, fast learning people out there. Find one, and hire her.
3) Don’t worry too much about the financials. You’ve proven that you can make a living from your business all by yourself. Find the right specialist and she will pay for herself. If your half-assed, part-time marketing is adding $3,000 of value / month to your business, then an enthusiastic, dedicated professional will add triple that.
4) All hires are crucial, but the first few more so than the rest. This is the foundation on which you will build your business. The easiest way to screw this up is to compromise. So don’t. When you’re trying to hire somebody, you often see a string of poor candidates followed by one who’s merely mediocre. You tell yourself that it’s impossible to find excellent people for the role, or your short term need is so great you just should just hire the best of the bad. Or you persuade yourself that your standards are impossibly high. Banish these dangerous thoughts. Look hard enough, and long enough, and you will find the right person. And when I say long enough, I really do mean long. It took me over 12 months to fill a role once.
5) If you’ve never hired for this role before, bring in an expert to help you. Hiring a sales person? Find somebody who’s hired a hundred sales people already. Don’t know an expert? Find somebody who does. Never, ever hire for a role you do not understand without outside help.
6) When interviewing, forget the trick questions. Unless you’re in the manhole business, don’t ask why manhole covers are round. Forget the boring questions – what are your biggest strengths and weaknesses – too. Ask the candidate to do a task relevant to the job. Hiring for a telesales person? Put her in a different room, get her to call you and sell you a car. Hiring a tester? Give her something to test.
I’m consistently astonished how often people can talk eloquently about a task but utterly fail to actually do it.
8) Always, always take up references. And always do them by phone, not in writing or by e-mail. You need to be able to notice the awkward pauses, ask follow up questions and encourage referees to volunteer information they might not give in writing. If somebody tells you it’s against company policy to give references, push and you can often get them concede to a quick, informal chat. Retracting a hire offer after a lousy reference is a horrible thing to do, but not as horrible as hiring the wrong person.
9) Paul Romer, the Stanford economist, says that a crisis is a terrible thing to waste. The current economic mess is no exception. There are some excellent people looking for jobs right now. You’ve got opportunities to minimise your risk, to experiment, and to try out flexible contracts. Found an excellent potential employee but still not 100% sure you need to hire her? Be explicit and honest about your intentions, your plans and your worries, and put her on a three month contract.
10) You still might hire the wrong person. If you do this, fix it as fast as you can. Whenever I’ve fired somebody, I’ve always regretted not doing it three, or even six, or twelve, months sooner. It’s always tempting to try one more thing, to give the person one more chance, to cut her just one more piece of slack. You cannot afford to wait. Confront the situation or you will bust your business or – worse – doom it to mediocrity.
This is an exciting time for you. Think it through, plan it well, get advice and take the plunge.Neil Davidson is co-founder and joint CEO of Red Gate Software. He also runs the annual Business of Software Conference with Joel Spolsky. His blog is at http://blog.businessofsoftware.org and you can follow him on Twitter at http://twitter.com/neildavidson.

2 Comments

I recently came across some advice for consultants, “If you don’t hit it off with the client, do not accept the engagement.” Why? Well, your success as a consultant depends on their being happy with the outcomes? It’s kind of like doctors and malpractice lawsuits. If you have bad bedside manners, the patient will sue you. The doctor has to be human. If the client isn’t happy, your business will suffer.
The same goes for employees. If you are interviewing and you don’t hit it off with them, nothing else will matter. You might get the offer, but forget it. An employer has too much power over your life.
The same thing goes for the hiring manager. If you don’t hit it off with them, forget the looming deadline, just do the candidate a favor and don’t extend an offer. It is a favor, because the conflict to come won’t be wonderful for either of you.
Likewise for contractors, consultants, or offshore vendors. We do better business amoung people we like. Find people you like. Do business with them.

Good employees are rare. Most are lazy and do not care about your product. There are 2 times when they put forth the most effort:
1) When they are bending over backwards to convince you to hire them
2) After you fire them, and they are collecting their final check
In the middle, they figure they are on the clock, and you can’t get much out of them. That is my experience as an ISV,and I’m on my sixth employee now. They are so called “sales” people, and I have yet to make a single sale out of any one of them. I personally have sold thousands of copies of my product, but it seems I’m the only one that can do it.